Employers urged to submit on proposed changes to employment relations

27 Mar 2018

The EMA is urging business to submit on the Employment Relations Amendment Bill this week before the close off date of March 30.

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New Zealand business wants a
vibrant, connected and flexible economy which enables it to meet the needs of
its customers, both in New Zealand and offshore. Therefore, business needs to
provide the government with input and feedback on the proposed amendments to
the employment relations framework.

“Businesses have to be able
to meet the growing demands of their particular operation and be agile enough
to remain competitive now and into the future,” says Kim Campbell, CEO, EMA.

“We already have many of the elements
which enable us to participate in a modern economy and we want to ensure we do
not lose these, nor create outcomes which do not deliver to the Government’s
call for a high wage, high performing economy.

“Our concern is that there
are proposed changes in the Bill which appear to deliver less flexibility and
more compulsion without improving productivity,” says Mr Campbell.

Responding to member
feedback, the EMA is particularly concerned around six key areas of the Bill.
These are:

-Restriction of
the 90-day trial period to businesses with fewer than 20 employees

-Restoration of
statutory rest and meal breaks

-Reinstatement of
an employee as the primary remedy to an unfair dismissal

-Restoration of
duty to conclude bargaining

-Restoration of 30
day rule whereby new employees are employed under terms consistent with the
collective agreement

-Restoration of
union access without prior employer consent and requirements to include pay
rates in collective agreements

In relation to productivity,
Mr Campbell, also commented on the minimum wage which will increase to $16.50
on April 1.

“This increase was heralded
by the previous Government and most businesses will have prepared for this.

“However, it’s important to
note that New Zealand does have the highest minimum wage, as a proportion of
the average wage, in the world. We are keen to understand how businesses will
increase productivity to cover further proposed increases in coming years,”
says Mr Campbell.

For example, a café employing
five staff on the minimum wage, will need to sell six more cups of coffee a day
to cover the increase from April 1. If the minimum wage increases to $20 per
hour, all other factors remaining equal, the café would need to sell 36 more
cups of coffee per day.*

“This raises important
questions for business. Do they sell more units, do they raise the cost of
their products and services or do they look for ways to automate processes? Decisions
around the minimum wage can’t be made in isolation of other dynamics, such as
the proposed employment relations changes,” says Mr Campbell.

*Calculation based on five
full time staff. Minimum wage at $16.50/hour will see a wage increase of $7,900
per annum, at $20/hour the wage bill will increase by $44, 800 per annum. The
number of cups sold to cover the increase is based on a business unit price of
$4.50, with a 75% profit margin. The minimum wage calculator is here.

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